EMC proposes taking company private
Des Moines-based Employers Mutual Casualty Co. announced Tuesday that it has proposed to acquire all of the outstanding shares of common stock of EMC Insurance Group Inc. that EMCC does not already own for $30 per share in cash.
The offer, which would transition EMC from a publicly held stock company to a private company, represents a 26 percent premium over EMCI’s closing stock price on Nov. 14, and almost a 13 percent premium to EMCI’s book value per share, the company said in a press release.
EMCC currently owns about 55 percent of the outstanding shares of EMCI common stock. EMCI has been a publicly traded company since 1982.
The proposed transaction would be structured as a merger of a to-be-created wholly owned subsidiary of EMCC with and into EMCI such that EMCI would become a wholly owned subsidiary of EMCC.
“EMCC believes that the proposed transaction is in the best interest of EMCI’s public shareholders,” the company said in the release. “Given the relative limited market trading volume and illiquidity for EMCI’s stock, EMCC believes the transaction will provide EMCI’s public shareholders with immediate and complete liquidity at a significant premium to EMCI’s current share price.”
Employers Mutual Casualty expects that a special committee of independent directors of the EMCI board of directors will be formed to consider the proposed transaction.
In a letter to shareholders, EMCC said it said it expects to fund the share purchase through a combination of existing cash and credit resources, which may include the issuance of surplus notes and/or a loan from the Federal Home Loan Bank.
“Given our strong financial position and excellent credit rating, we are highly confident in our ability to obtain such financing and we would not anticipate subjecting our proposed transaction to a financing condition,” the company said in the letter.
The offer, which would transition EMC from a publicly held stock company to a private company, represents a 26 percent premium over EMCI’s closing stock price on Nov. 14, and almost a 13 percent premium to EMCI’s book value per share, the company said in a press release.
EMCC currently owns about 55 percent of the outstanding shares of EMCI common stock. EMCI has been a publicly traded company since 1982.
The proposed transaction would be structured as a merger of a to-be-created wholly owned subsidiary of EMCC with and into EMCI such that EMCI would become a wholly owned subsidiary of EMCC.
“EMCC believes that the proposed transaction is in the best interest of EMCI’s public shareholders,” the company said in the release. “Given the relative limited market trading volume and illiquidity for EMCI’s stock, EMCC believes the transaction will provide EMCI’s public shareholders with immediate and complete liquidity at a significant premium to EMCI’s current share price.”
Employers Mutual Casualty expects that a special committee of independent directors of the EMCI board of directors will be formed to consider the proposed transaction.
In a letter to shareholders, EMCC said it said it expects to fund the share purchase through a combination of existing cash and credit resources, which may include the issuance of surplus notes and/or a loan from the Federal Home Loan Bank.
“Given our strong financial position and excellent credit rating, we are highly confident in our ability to obtain such financing and we would not anticipate subjecting our proposed transaction to a financing condition,” the company said in the letter.
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